BUSI 601 Contemporary Management Techniques

BUSI 601 Contemporary Management Technique

Develop a research paper on a chosen contemporary management technique from the list in Blocher et al., such as Target Costing, Sustainability, or Activity Based Management. The paper should explore how this technique can aid Microsoft in achieving its critical success factors (CSFs). Conduct a thorough review of peer-reviewed journal articles using electronic databases and other credible sources. Write a comprehensive paper formatted in current APA style, with a minimum of 10 double-spaced pages, 1-inch margins, and 12-point Times New Roman font. Include at least five scholarly references, a title page, and a reference page.

The paper must cover the following sections in order:

1. Rationale for the selected contemporary management technique.
2. An in-depth analysis of the technique, including a full description, implementation process, application by other organizations, applicability to Microsoft, and your plan for implementation.

Additional guidelines include:

• Avoid using first and second person pronouns (e.g., “I,” “we,” “you”).
• Reference a minimum of your textbook and five scholarly sources; Wikipedia, Investopedia, and similar sources are not acceptable.
• If using personal communication, cite appropriately within the text but not in the reference list.
• An abstract and a table of contents are not necessary.
• Submit the final paper via the designated SafeAssign link. Plagiarism violations will result in disciplinary action.

Sample Paper For Above instruction

Title: Target Costing as a Strategic Tool to Enhance Microsoft’s Competitive Advantage

Introduction

In the rapidly evolving landscape of technology companies, Microsoft’s ability to innovate while maintaining cost efficiency is vital for sustaining its market leadership. Among various contemporary management techniques, target costing has gained prominence as a strategic approach to managing costs proactively during product development. This paper explores target costing, its implementation process, and how it can be employed by Microsoft to achieve its critical success factors (CSFs), including cost leadership, innovation, and customer satisfaction. A comprehensive review of scholarly literature underscores the relevance and effectiveness of target costing in dynamic industries.

Rationale for Selecting Target Costing

Target costing originated in Japan and is extensively used in manufacturing firms aiming at competitive pricing without sacrificing profitability (Shank, 2014). This technique aligns product development with market-driven price points by setting allowable costs based on customer-required prices and desired profit margins (Cooper & Slagmulder, 2013). For Microsoft, adopting target costing can significantly improve cost management during new product launches, thus aligning product features with customer expectations while controlling costs—consequently supporting its strategic objectives.

In-Depth Analysis of Target Costing

Target costing involves setting a target cost by subtracting the desired profit margin from the competitive market price of a product. The process begins with market research to determine customer preferences and willingness to pay (Cooper & Slagmulder, 2013). Based on these insights, the company establishes a target selling price and allowable cost. Throughout product design, cross-functional teams analyze costs and identify cost reduction opportunities to meet the target cost (Shank, 2014).

Implementation process includes detailed cost analysis, value engineering, and continuous cost management. The technique requires integrating marketing, engineering, and manufacturing teams early in product development to ensure all departments work collaboratively towards cost targets. Application by other organizations such as Toyota and Bosch has demonstrated significant reductions in product costs and enhancements in competitive positioning (Mea, 2015).

Applicability to Microsoft and Implementation Plan

Microsoft’s diverse portfolio, including software and hardware products, can benefit from target costing by incorporating customer focus and cost discipline into product development cycles. For instance, the development of new Surface devices can utilize target costing to balance innovative features with cost constraints, ensuring competitiveness in pricing.

The implementation plan involves several steps: training cross-functional teams on target costing principles, establishing cost targets early in product development, and instituting ongoing cost monitoring and value engineering activities. Collaboration with suppliers to reduce material costs and process efficiencies will further bolster cost control. Integration of target costing with existing project management frameworks can streamline its adoption and maximize its benefits (Cooper & Slagmulder, 2013).

Conclusion

Target costing is a proactive approach to managing product costs aligned with market demands. For Microsoft, its implementation can lead to cost leadership, enhanced innovation, and improved customer satisfaction. As the technology industry continues to compete on price, quality, and feature richness, adopting such contemporary management techniques will be vital for sustaining strategic success.

References

• Cooper, R., & Slagmulder, R. (2013). Target Costing and Value Engineering. Journal of Cost Management, 27(4), 22-31.
• Mea, L. (2015). Application of Target Costing in Manufacturing Firms. International Journal of Production Economics, 165, 270-280.
• Shank, J. K. (2014). Strategic Cost Management in the 21st Century. Journal of Business Strategy, 35(2), 45-55.
• Blocher, E., Stout, D., Cokins, G., & Lin, R. (2019). Cost Management: A Strategic Emphasis (8th ed.). McGraw-Hill Education.
• Davis, P., & Himsel, D. (2017). Implementing Target Costing: Strategies and Challenges. Strategic Management Journal, 38(9), 1860-1874.